What a turnaround. After four straight weeks of losses, Indian markets staged their biggest weekly
recovery in nearly four months — and it wasn’t just one or two big stocks pulling the weight. This was
a broad-based comeback, with FIIs finally returning, Q1 earnings doing the heavy lifting, and oil prices
cooperating just enough to let the bulls breathe. Here’s exactly what happened, day by day.
1. FIIs Finally Turned Buyers — and That Changed Everything
The most significant shift this week was in foreign institutional investor (FII) behaviour. After weeks of relentless selling that dragged the market down, FIIs turned net buyers, pumping in roughly ₹7,000 crore over the week. On Thursday alone, FII buying hit ₹2,982 crore, with DIIs adding another ₹998
crore on top.
This kind of reversal is what sends markets up sharply — when both FIIs and DIIs are buying
simultaneously, there’s no counter-pressure pulling prices down. By Friday, even FII buying had
moderated to ₹278 crore, but DIIs stayed firm with ₹2,260 crore of inflows. The buying wasn’t
reckless; it was deliberate, and largely earnings-driven.
2. Monday’s Recovery Set the Tone for the Entire Week
Coming into Monday, the market had closed at 76,060 on the Sensex after four consecutive weekly declines — a bruising stretch driven by West Asia tensions, rising crude oil prices, and weak banking earnings. Two things changed over the weekend: Brent crude prices dipped, and there was a temporary pause in US military strikes on Iran.
That was enough. The Sensex surged 766 points (+1.02%) on Monday, and Nifty jumped 228 points (+0.96%), with financials and IT stocks leading the charge. Monday’s session also saw HDFC Bank, ICICI Bank, and Reliance Industries as the top movers in the Sensex. Market breadth was decisively bullish — roughly 75 stocks advancing for every 31 declining at the open. Monday effectively reset the mood for the entire week.
3. The Bajaj Twins Stole Friday’s Show
The week’s most impactful earnings story came at the very end. Bajaj Finance and Bajaj Finserv both reported Q1 FY27 results on Thursday night, and the numbers were hard to argue with:
Bajaj Finance posted a 27.6% jump in consolidated profit after tax to ₹6,081 crore, with net interest income growing 22.9% to ₹12,571 crore and AUM rising nearly 24% to ₹5.47 trillion. Gross NPA improved to 0.96% from 1.03% a year ago — a sign the loan book is healthier, not just bigger.
Bajaj Finserv reported total income up 19% to ₹42,037 crore and consolidated profit after tax up 18% to ₹6,297 crore. Life insurance and asset management were standout contributors.
The market reaction on Friday was sharp: Bajaj Finance surged around 7% and Bajaj Finserv gained over 6%, making them the undisputed leaders of the Sensex and Nifty on the week’s final day.
4. Auto and Financials Led the Sector Scoreboard
Beyond the Bajaj twins, the sectoral performance told a clear story:
Nifty Auto was the top sectoral gainer (+1.64% on Friday alone), with Mahindra & Mahindra
rising 1.2%
Nifty Financial Services climbed 1.31% on Friday, and the Nifty Financial Services Ex-Bank index surged an impressive 2.91%
Nifty Oil & Gas added 1.08%, helped by easing crude prices
Nifty Pharma rose 0.72%
IT stocks and FMCG saw some profit-booking through the week, especially on Tuesday. TCS, Infosys, and Eternal were among the notable laggards on Friday even as the broader market finished higher.
5. Midcaps and Smallcaps Outperformed
One of the more interesting features of this week’s rally: the broader market ran faster than the
benchmarks. Midcap and smallcap indices outperformed the Nifty 50, which is typically a sign of risk
appetite returning — investors willing to go further out on the risk curve when confidence is building.
This is worth watching into next week; sustained midcap outperformance usually signals a more
durable rally rather than a relief bounce.
6. Crude Prices and Iran — Still the Background Noise
The Iran-US situation remained a live overhang through most of the week. A temporary ceasefire helped trigger Monday’s rally, but by Friday, the conflict was still unresolved, keeping investor sentiment cautious on the geopolitical front. Brent crude did ease — dropping around 3% to $81.60 a barrel on Friday — which took some pressure off inflation expectations and gave the RBI room to maintain its neutral stance.
If crude stays in the low-to-mid $80s range, markets will likely treat it as a manageable backdrop. If it spikes back above $90, expect sentiment to sour quickly.
7. IPO Market Quietly Buzzing
Two IPOs were open during the week and saw contrasting responses. The MV Electrosystems IPO was subscribed over 12x by July 31, pointing to strong retail appetite in this segment. The Juniper Green Energy IPO was subscribed less than 0.5x — a reminder that not all IPOs are equal in investor eyes, and the market is still selective even when overall sentiment is improving.
What to Watch Next Week
Iran-US conflict resolution (or escalation) — the single biggest wildcard. Any escalation near the Strait of Hormuz could push crude back up and reverse this week’s gains quickly
More Q1 FY27 earnings — the earnings season is in full swing; results from banking, pharma, and IT majors will drive stock-specific moves
RBI’s next MPC meeting (Aug 3–5) — the rate decision itself is widely expected to be a hold, but the RBI’s commentary on inflation and growth will be closely parsed for hints about the second half of the year
US economic data — Fed signals and US jobs/inflation numbers will shape FII flows into
emerging markets like India in the weeks ahead
Midcap/smallcap momentum — if broader market outperformance continues into next week, it’s a signal the rally has legs beyond just index heavyweights
The Takeaway
This week was the market doing what it does best after a prolonged selloff — recovering sharply when the bad news stops getting worse. Four weeks of losses were largely erased in five sessions, driven by a combination of improving FII sentiment, better-than-expected corporate earnings (especially from the Bajaj group), and some relief on the crude oil front.
The underlying structure looks healthier than the recent decline suggested. But with geopolitical uncertainty still unresolved and the RBI meeting around the corner, the next week will be a real test of whether this recovery has staying power or whether it’s just a relief bounce before the next bout of volatility.
Stay invested, stay diversified, and keep an eye on crude prices — that’s still the number that’s most likely to make or break market momentum right now.
This article is for informational and educational purposes only and should not be considered financial
advice. Please consult a registered financial advisor before making investment decisions. Market data
sourced from NSE, BSE, and publicly available financial news reports.
